Construction Product Manufacturing Still Awaiting Recovery

THE RECOVERY previously anticipated for the UK construction products manufacturing industry gained little traction in the third quarter of 2025, according to the Construction Products Association’s latest State of Trade Survey.

Whilst there was growth in sales volumes reported over the quarter for both heavy side and light side manufacturers, on balance, heavy side sales were still lower than the same quarter of 2024.

In Q3,25, a net balance of 20% of heavy side manufacturers and 29% on the light side reported an increase in product sales, compared to Q2. Both were relatively weak balances for the year so far, but for the heavy side, a greater weakness was evident when comparing sales to Q3,24. A balance of 7% of firms reported that sales had declined in annual terms. However, light side firms continued to report annual growth, according to a 57% of firms, on balance

At a time when demand, sales and construction activity remain weaker than expected, the survey also showed that manufacturers are facing continued cost inflation. Wages & salaries, raw materials and energy costs were all reported higher in Q3. Indicating that the rise in employer National Insurance Contributions in April has also been a significant driver of input cost inflation, taxes were the primary cost increase for heavy side manufacturers.

Awaiting Recovery

Rebecca Larkin, CPA Head of Construction Research

Rebecca Larkin, CPA Head of Construction Research, said: “The prospect of a quick recovery appears unlikely, given that the majority (78%) of heavy side firms anticipated that sales will remain flat in Q4 and 17% of light side firms anticipated that sales would fall, marking the first negative balance in two years. Weak growth in heavy side sales reflects fewer construction project starts, which now seems to be leading to smaller pipelines of work at the finishing stages too.

“Speculation and concern around what measures will be announced in the Autumn Budget later this month and, crucially, where the burden of any tax rises will fall, is playing on the minds of all firms in the construction supply chain and prolonging a climate of uncertainty that means a recovery is only likely to begin in 2026.”

Key survey findings included:

• A balance of 20% of heavy side firms and 29% of light side firms reported that construction products sales rose in 2025 Q3 compared with Q2
• On balance, 7% of heavy side manufacturers reported that product sales fell in Q3 compared to 2024 Q3
• 78% of heavy side manufacturers anticipated that sales would be flat in Q4; 17% of light side forms anticipated a fall in sales in Q4
• Costs from taxes were reported higher by all heavy side firms and two-thirds of those on the light side
• ‘Demand’ and ‘labour availability’ were the two most frequently-cited constraints on activity over the next 12 months

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